After a 26% plunge in EBITDA to €187 million in the third quarter, German specialty chemicals producer Lanxess has narrowed its guidance for full year 2013. The company now expects EBITDA pre-exceptionals to be in the range of €710-760 million rather than the €700-800 million predicted earlier.

Implementation of the efficiency scheme "Advance", announced in September, is now in progress. This calls for job cuts of around 1,000 as well as unspecified portfolio adjustments and is expected to generate annual savings of roughly €100 million from 2015.

Lanxess blames in part lower selling prices and inventory reductions for the poor Q3 2013 showing, in which the EBITDA margin deteriorated to 9.1% from 11.8% in the 2012 quarter.  The net profit fall of 88% to €1 million is said to reflect higher depreciation and amortisation as well as an exceptional charge of €20 million for the efficiency scheme.

Group sales of the company now based at Cologne receded by 5% to €2.1 billion in Q3. The biggest decrease, of 17%, was seen in South America, despite a relatively strong performance in Brazil. Sales were down 13% in North America, flat in EMEA - excluding Germany, where revenues declined 7% - and up 5% in Asia. Volume sales rose by 9% year-on-year, even though selling prices declined 11%.

Despite volume sales up 14%, revenues of Lanxess' largest business segment, Performance Polymers, deteriorated by 8% to €1.2 billion as selling prices fell 19%. Rubber products were the hardest hit. The segment's EBITDA pre-exceptionals declined by 45% to €84m. The company said it faced inventory devaluations of €10 million as it had to pass on raw materials price increases, in particular for butadiene.

In the Advanced Intermediates segment, sales were flat at €403 million. Both industrial intermediates and fine chemicals producer Saltigo benefited from continuing good demand for products used in agriculture and the flavors and fragrances industry. Volume sales rose 3%, but selling prices dropped back 3% as declines in raw materials prices had to be passed on. The segment's EBITDA pre-exceptionals dropped back 5% to €71 million.

The Performance Chemicals Segment saw its Q3 sales decrease 2% to €546 million, despite a good performance by water treatment products, rubber chemicals and material protection products. Selling prices were flat. The segment's volume growth of 3% was unable to compensate for negative currency effects of around 5%. EBITDA pre-exceptionals fell 4% to €72 million.

Lanxess said it expects the "modest economic momentum" to continue in the fourth quarter, with emerging economies providing only "limited impetus." Europe is forecast to improve without showing any "lasting stability." U.S. growth is seen as remaining "moderate" due to the ongoing budget crisis.

The market environment will remain "difficult," the company said, with automotive production seeing only slight improvement, driven by the U.S. and China. The construction industry should improve in the U.S. and China while the downturn in Europe is seen as bottoming out. Demand in the agrochemicals sector is expected to continue good.